Credit Union Home Loans: Refinancing Your New House

You have many options available to you when seeking to refinance your new house. The financial institution you choose to loan you the money for that home should be the one offering you the best deal with the best services you can find. As many new home loan refinancers have discovered, this often comes in the form of a credit union. 

Credit unions are unique among other financial institutions because they are not-for-profit, so their earnings go back to their members and community rather than into shareholder coffers. Where a bank’s modus operandi is to make a profit, a credit union’s is to serve its community.

Where banks have customers, credit unions have members, like cooperatives. For this reason, each member has an equal share in the ownership and voice in the running of the institution. As such, credit unions are able and directed to offer its members a far better and more accessible array of financial services and products than other institutions, including for when you refinance your new house. 

As the following overview of the top reasons why will show, before taking out another bank loan, you should always try first to refinance your new house through a credit union.

refinance new house through credit union

Benefits of Credit Union Home Loans to Refinance Your House 

Credit Union Home Loans Offer Lower Rates and Fees

While banks are created to earn profits for their shareholders, and their investors, credit unions, are designed to provide better services to their shareholders, their members. As such, any monies a credit union earns through fees, interest, etc. it puts back into the credit union and the community it serves, in part by offering low rates and fees on financial products and services. 

Credit Union Members Receive Quick and Easy Approval

By the same token, because they are designed to serve the members and their community and not to line the pockets of some distant, faceless stockholders, credit unions are inclined to work with their members who seek loans to find a loan product or arrangement that can work for everyone. There also tends to be far fewer hoops to leap through to get approved for a loan with a credit union than a bank. 

An All-in-One Financial 

Additionally, credit unions are hard enough to beat when it comes to refinancing home loans, but especially if it’s the same credit union as where you already do most of the rest of your banking. At a credit union where you already have a checking or savings account, you’ve already established a history they can draw on when determining what type of loan offer to make you and whether or not to approve you. 

Credit unions will often approve their members based purely on their history with that member without giving much attention or credence at all to common disqualhelocifiers like “dings” on their credit report, low credit scores, inadequate credit history, past loan defaults or insufficient or inconsistent income. 

When you think of it, that’s the whole reason credit unions exist anyway: to serve their communities, which starts with their members. So, it would only make sense that they do all they can to make it easier for those members to get access to the financial services they need. 

One last point on that note: the same applies in reverse. That is, if you have a home loan with a particular credit union, it can be much easier to get access to other financial products and services from that same credit union, such as a new credit card or a car loan.

The same applies to a home equity loan or home equity line of credit, whether you take one out at the same time as your refinance, such as to avoid paying costly private mortgage insurance, or any other time down the line. With a home mortgage already held by a particular credit union, it can be much easier to get that home equity loan or HELOC against that home that you desire. 

By contrast to all this, every time you go to a bank to apply for a new home loan or any other financial instrument, you must essentially start over again from scratch. 

Credit Unions Help Members Build & Improve Credit

In conjunction with offering loans to people who have poorer credit is helping those people to improve their credit scores. Credit unions accomplish this by providing a more extensive range of loan products. These products include those more well-suited to people with poor credit.

Credit unions may offer secured loans at a reasonable cost to help with that directly, or provide debt management consulting and credit counseling services to help members get a handle on their credit as they navigate the loan application or repayment process. 

Personalized Service and Attention

Credit unions tend to offer their members more personal service than banks do for their customers. As such, you’d be much more likely to be successful in negotiating the terms of your loan to better suit your current situation and needs. A credit union is simply far more likely to work with you, whereas a bank is more apt to require you to work within its set parameters and framework. 

Gain Flexibility, Education, and Support With Credit Unions

Building on the dual benefits of credit score boosters and more personalized services, credit unions also commonly do a lot to help members, once refinancing their new home loan, to make payments on time and meet their loan agreements.

This includes educational courses and personal consulting services geared toward personal money management and practical debt repayment strategies. It can also include flexibility in renegotiating terms of the loan, like payment dates and amounts, if circumstances in your life change. Banks often lock you into the agreement you make and can be inflexible when it comes to making any changes. They are also unlikely to offer you as prolific and personalized education and consulting options. 

Your Financial Business Stays In-House

Banks often sell home loans to third-party investors who then take over the administration of that loan. With a bank mortgage, you could be passed around from one company to another scores of times by the time you pay it off. Not only can this be highly inconvenient and confusing, but with continually changing payment dates, amounts, addresses, and payees, you could easily miss payments along the way, damaging your credit score. 

Credit unions are far more likely to keep your loan in-house and manage it for the entirety of the life of the loan. This way, when you refinance your new house through a credit union, you always know when and where to make payments and whom to contact with any questions or concerns.

Not only does that make it easy for you to manage your loan, but it assures you that anytime you reach out to discuss your loan, the person you’ll be speaking with is likely to be quite familiar with you and well-aware of your circumstances and financial history. It may even be the same person each and every time. You can’t count on that from a bank.

If you are looking to refinance your home or are interested in a new home loan, we'd love to chat. Contact us today at 800.342.2352.


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